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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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November 6, 2008 8:38 AM

Another Day Another $50 Billion NOT Spent On Fiber

OK, this is starting to get a bit absurd. As I continue to explore our past, present, and future economic stimulus packages I can't help but mention reported plans to extend another $25 billion line of credit to the auto industry in addition to the $25 billion Congress has already set aside.

Before I get into this I have to say that in no way am I saying we shouldn't be doing this. I totally understand that the auto industry is responsible for thousands and even millions of jobs in this country, and that this money isn't totally a giveaway so much as a loan that'll hopefully be paid back, so I'm generally supportive of efforts to ensure their continued viability.

Yet let's take a step back and consider this.

The first half of this $50 billion was ostensibly to support new investment in alternative fuel cars. So after years of automakers fighting higher fuel efficiency standards and refusing to invest in developing alternative fuel cars, we're now having to bail out an entire industry with taxpayer dollars in the hopes of finally spurring them to action now that the market has passed them by.

The second half of this $50 billion is to serve as a line of credit upon which automakers can draw upon to keep up with basic expenses, like their healthcare and pension obligations to their workers. While I know that much of this has to do with helping them overcome the lack of available credit elsewhere, I can't help feeling like this is an instance of taxpayer dollars having to prop up a business model that can't support itself, which makes me worry about the long-term future of getting that money back.

But my issue isn't with the mistakes the auto industry has made. Instead what frustrates me is the mindset that's led to these massive infusions of cash that says it's more important to protect existing paradigms than to embrace new paradigms and possibilities. That it's more important to bail out the biggest of companies so they can continue with business as usual than to support the efforts of smaller businesses and independent entrepreneurs to innovate and establish new paradigms for the 21st century.

It feels like we're so caught up in the frenzy of trying to hold on to what we already have that we've taken our eye off the ball as to what can be done to support the growth of new industries and the creation of new jobs.

Again, I'm not trying to say we're wrong for doing this, but instead I'm trying to stress the fact that instead of just trying to survive we have the opportunity to thrive during this economic crisis so long as we prioritize supporting new ideas and entrepreneurship at least as much as we do holding on to old ideas and the status quo.

I mean think about it: what would happen if we gave fiber deployers a $50 billion line of credit to deploy new networks in rural areas? I'd bet within 5-10 years we'd have well over half of rural America wired with full fiber networks, if not more. That would put us so far ahead of the rest of the world it's not even funny.

By doing this we'd be creating jobs associated with the deployment and management of the network, we'd be empowering existing businesses to expand and laying the groundwork for new businesses to locate themselves in rural areas, we'd be establishing the framework for a host of new efficiencies that can be driven by the use of the network across all of society, and beyond.

Plus it's arguable that those entities that want to deploy fiber have greater needs than the auto industry as without huge amounts of capital they can't afford to put any infrastructure in the ground, without that infrastructure they don't have any revenue, and without any revenue they can't be creating jobs.

I've said this once but I'll continue saying it over and over until it gets through to people: it's not that we can't wire rural America with fiber--we've got the people, technology, demand, and resources to do so--it's about where our priorities are.

And in my mind while we're working to bolster existing paradigms we need to be devoting as much time and energy to supporting efforts to establish new paradigms as this is the only way we're going to be able to create the new jobs, new growth, and new efficiencies that'll help us weather this and any future economic storm.

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Comments (2)

Public Money should have strings attached. If we are going to use public money - we need to be responsible. It should not just be a handout for companies to build next-gen monopolies.

I'm all for a program that will extend loans, but networks built with that money must be accountable to the public. We should focus on encouraging cooperatives - who must answer to their customers because we should not waste money on competing networks in rural areas. Either the infrastructure should be open to everyone like the roads or, if it will be closed, the network operator must be directly accountable to the communitiies they serve.

Posted by Christopher Mitchell on November 6, 2008 3:30 PM

You should get this comment to Blair Levin or to someone on Nancy Pelosi's staff who is shaping her infrastructure bailout package.

Posted by Catharine on November 6, 2008 9:22 PM

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